Buy Life Insurance with a Set Blueprint and Strategy

As I am now Papa Aspinwall with four grand children, I've done good with my insurance portfolio. With the accumulated knowledge in my hand, I offer some ideas and strategies to help you build a sensible portfolio of LIFE insurance without over buying.

THINGS TO AVOID THAT WILL COST YOU

• Do not rely entirely upon your job insurance. If you lose your job, you will not be covered.
• Stand alone accident insurance is not needed, unless your job is highly dangerous. It can be bought cheaper as a rider on your privately held life policy.
• Never tell yourself that you do not need a private life policy. That could backfire on you badly by leaving your family in a financial shipwreck, if you were between jobs.
• If you are adequately covered, do not add on insurance with a bank loan or mortgage.
• Whole life policies are obsolete, except to cover young children. I will show you a better path to follow. It will save you money and offer more coverage.
• Avoid any agent that uses hard sell tactics or makes a derogatory remark to your wife about what he feels is your unconcern about her. A last ditch close like that shows desperation and unprofessional demeanor. Stand up and order him to pack up and leave immediately.
• If an agent does not want to show you a policy that meets or beats a Universal Life, send him on his way.
• Fail not to get a U/L policy with a flexible premium. It will be your most valuable feature in your entire financial plan.

SCENARIO: UNMARRIED MALE AGED 18-25 WITHOUT CHILDREN

• Buy a private policy for a $15,000 coverage. Look at a 10 year paid up, a 20 year paid up, a paid up at age 65 or a Universal Life.
• Take the life insurance that goes with the medical policy offered as a job benefit.

SCENARIO: MALE AGED 18-25 WITH CHILDREN

• Keep or buy a private policy for a $15,000 coverage. Use a 10 year paid up, a 20 year paid up or a paid up at age 65 to lay a foundation.
• Take the life insurance that goes with the medical policy offered as a job benefit. This will be a gravy policy to help your family make the transition to life without you.
• Purchase a joint Universal Life covering both spouses up to $50,000 and add an accidental death rider and a childrens rider. Let this be your family coverage policy.
• Buy up to $250,000 in term life. This premium should be less than $30.00 a month. Once your children have graduated from college, this policy can be dropped or replaced to obtain less coverage at a level premium.
• While your children are about ten years old, purchase either a paid up at 65 or a whole life policy. You can lock in such low rates that it makes sense to cover them for $10-20,000 range. When they reach age twenty, show them the policies, explain your reason was to lock in a cheap premium for them and hold the policies, until they reach age 25. Between that and age 25, educate them on why they should always keep these cheap policies. Never cash them out.

SCENARIO: MALE AGED 50+ WITH NO CHILDREN AT HOME

• Hold your paid up policies. Never cash them out.
• Drop the term insurance, if premiums too high and budget is tight.
• Maintain job related benefits with life insurance.
• Make sure the childrens rider was removed from the U/L policy.
• If you are on a tight budge, reduce the premium on the U/L policy.

REASONS FOR EACH RECOMMENDATION

• I've met people who feel like their job insurance is enough coverage. Appears that they have never given it careful thought. Unless this policy is portable, you must maintain additional coverage outside of your job benefits.
• A good insurance strategy could be the cornerstone of your financial plan. In my own case, my Universal Life policy has been flexible enough during a period of personal crisis or job loss. In the old days of whole life, the locked in premiums caused me to jettison these policies during budget cutting times.
• A U/L policy with flexible premiums can handle the high winds of an economic storm where fixed premiums get thrown overboard.
• Bank loans/mortgage life and whole life are the most expensive products. The one exception is the purchase of whole life on a young child to lock in low premiums for a lifetime.
• Once again, be sure that your main family policy e.g. the joint U/L has a flexible premium. In my earlier days, I had to drop numerous whole life policies when I had periods of no income.

Understand that a U/L policy is a term insurance combined with a cash accumulation feature. My U/L has been stable for 25 years. I've only had to adjust the premium maybe three times. So, using this product, I effectively locked in my premiums and costs. My cash value is pretty high and the policy continues to cover my wife and I. When one of us dies, the premiums stop, the benefit is paid and the other spouse continues to be covered. So, when I hear people talking down a U/L product, I hear a person who knows not what he is saying.

This is a sketch of an idea. I tried to avoid endless details. If you would like for me to assist you in the area of family budgeting and insurance strategies; I do charge a fee.

You are invited to call me to ask about anything stated on this blog. That's no charge. I only charge when you want to sit down and make a plan. As a bonus, just ask me and I will tell you a few places you could probably save money on your auto insurance.

Finally, if you happen to be in the market for a mortgage, see the link to Loan Home. Loan Home offers a REBATE on your mortgage. For example, you woulod capture a $400.00 rebate, if you borrowed $125k on your mortgage.

Respect.

Ken Aspinwall